AJU PRESS ASIA FIRST NEWS AGENCY

Journalist

&
""
Latest by
  • K-pop trains idols for debut, but not for what comes after
    K-pop trains idols for debut, but not for what comes after SEOUL, July 30 (AJP) - If surviving South Korea's fiercely competitive education system seems difficult, try becoming a K-pop trainee. "Once school ends, you go straight to the practice room," one trainee recalled. "There's no time to see friends or even grab something to eat together." For thousands of teenagers, that routine is the price of pursuing one of the country's biggest dreams. K-pop has built one of the world's most sophisticated talent factories. It knows how to train young performers to sing, dance and captivate audiences before millions of fans around the world. What it has been far less successful at is preparing them for the outcome most trainees ultimately face: never making their debut. That imbalance is becoming increasingly visible as entertainment agencies pour more money into developing globally competitive acts while the number of trainees narrows. According to the latest nationwide figures cited in a doctoral dissertation by Clon member Kang Won-rae, the number of registered trainees in South Korea's popular-culture industry fell from 1,895 in 2020 to 1,170 in 2022. Of those, 752 — or 64.3 percent — were training to become singers. The figures do not show whether the decline continued after 2022. They do, however, suggest that the formal trainee pool was shrinking even as K-pop expanded into a truly global business. The financial rewards for those who succeed have rarely been larger. HYBE reported record second-quarter revenue of 1.45 trillion won ($1.04 billion) and operating profit of 170.9 billion won in 2026, buoyed by BTS's long-awaited return. Concert revenue surged 630 percent from the previous quarter to 647.7 billion won. BTS's album ARIRANG topped the Billboard 200 for three consecutive weeks, while its lead single SWIM remained on the Billboard Hot 100 for 17 weeks. HYBE's newer group CORTIS also surpassed three million cumulative album sales with its second EP and debuted at No. 3 on the Billboard 200. Those results demonstrate what the trainee system can produce. Kang's research asks a different question: what happens to the far larger number of trainees who never reach the stage? Drawing on interviews with nine current or former trainees and three industry professionals, Kang explores the realities of education, health care, personal autonomy and career preparation inside South Korea's trainee system. The sample is too small to represent the entire industry, a limitation acknowledged in the dissertation, but the interviews provide an unusually detailed glimpse into a world that largely operates behind closed doors. One trainee described entering the system convinced that success was simply a matter of working harder. "Everyone wants to become BTS or BLACKPINK," the participant said. "But only a small number of trainees debut. There needs to be a safety net for those who succeed and those who do not." Built to debut The modern trainee system emerged during the 1990s as entertainment companies began recruiting teenagers years before their public debut. The success of H.O.T. established the blueprint of carefully selecting members, refining their vocal and dance skills and launching them as a coordinated group. BoA later demonstrated how foreign-language instruction and cultural education could prepare artists for overseas markets. Over time, casting, training, music production, image management and marketing evolved into an integrated company-led development process. A 2021 study by Chung-Ang University researcher Lee Ye-il described South Korea's approach as producing "full-fledged" idols expected to perform at a professional level from their first appearance. Japan's idol industry, by contrast, has traditionally emphasized performers whose growth unfolds in public after debut. That distinction helps explain why Korean idols are often admired for their polish. Trainees can spend years studying singing, dancing, acting, foreign languages, fitness, communication and media skills before audiences ever see them. Yet while the goal is standardized, the path is not. One participant recalled spending long days inside an agency with little structured instruction. "It was basically, 'Show up at one in the afternoon, leave at eleven at night, and figure it out yourself,'" the trainee said. "I expected manuals and teachers. That wasn't what happened." The system has become remarkably efficient at preparing performers for debut. The quality of training and support they receive before reaching that point, however, varies widely from one agency to another. Where artist training and education diverge Many trainees enter agencies while still attending middle or high school. Kang's interviews found that balancing education with training often proved difficult. Some participants regularly arrived late to class or left school early. Others became isolated from classmates or were simply too exhausted to participate in school life. Several interviewees said the uncertainty surrounding debut was harder than the demanding schedule itself. Trainees rarely know when — or whether — they will debut, how long they will remain under evaluation or what will happen if they are released. Some agencies help trainees attend arts schools, enroll in online classes or prepare for South Korea's high-school equivalency examination. Such support, however, depends largely on individual company policies. Career preparation for trainees who fail to debut is even less developed. That exposes a structural weakness in the current model. K-pop's trainee system excels at preparing teenagers for one highly competitive career. It provides far less preparation for the career most trainees will ultimately need — the one after they leave the agency. Years spent training may leave former trainees outside conventional education pathways while providing no formal qualification recognizing the skills they acquired. Health and autonomy Education is only where the imbalance begins. Participants described severe dieting, nutritional deficiencies and menstrual irregularities among female trainees. One interviewee said disrupted menstrual cycles were common and that agencies remained primarily focused on maintaining a particular appearance. Others reported anxiety, panic attacks, depressive symptoms and breathing difficulties under the pressure of constant evaluations. The interviews cannot establish how widespread such experiences are across the industry. They do, however, illustrate how intense performance expectations can conflict with adolescent physical and mental health. Access to counseling also varied significantly. While larger companies often offered psychological support, several participants questioned whether seeking help might influence future evaluations. Interviewees also described restrictions on mobile-phone use, social media and personal relationships. Some reported having messages monitored, while others said they experienced pressure regarding cosmetic procedures. Questions over fairness surfaced repeatedly. One trainee pointed to Mnet's Produce series. "If I don't make it because someone else is better, I can accept that," the trainee said. "What hurts is thinking the result may already have been decided while everyone is told it's a fair competition." That concern is not without precedent. South Korean courts later confirmed that producers manipulated the final lineups in two seasons of the Produce franchise regardless of audience votes. Agencies, however, also face commercial realities. Industry participants interviewed by Kang estimated that training costs can reach roughly 15 million won per trainee each year and exceed 200 million won to prepare a five-member group over three years. From the company's perspective, every trainee represents a significant investment with no guarantee of financial return. That creates a structural contradiction. Trainees are simultaneously students, audition participants and commercial investments. Yet legally they fall neatly into none of those categories. South Korean labor authorities have generally regarded entertainers as parties to specialized contracts rather than employees protected under labor law, leaving trainees in particular without clearly defined legal status. Establishing a common floor The government has begun strengthening protections. On Jan. 1, 2026, the Ministry of Culture, Sports and Tourism introduced revised standard contracts for trainees and minor entertainers following amendments to the Popular Culture and Arts Industry Development Act. The revisions prohibit specific misconduct toward minors, require agencies to appoint youth-protection officers from the beginning of every contract and make access to mental-health treatment easier by removing the previous requirement that depressive symptoms be deemed "severe." The reforms establish a stronger legal framework. Whether they transform trainees' daily experiences, however, will depend largely on how individual agencies implement them. Kang proposes four additional reforms: requiring agencies to establish internal education policies for minors, introducing income-protection measures modeled on California's Coogan Law, making career education and health examinations mandatory parts of trainee contracts, and creating an independent entertainment-industry ombudsman to investigate complaints before problems escalate. K-pop's weakness has never been a lack of training. Its blind spot is that the industry has invested farmore systematically in creating stars than in protecting the young people trying to become them. The next stage of K-pop's global evolution, therefore, may have less to do with producing better performers than with building a system that values education, health care and life after training as essential parts of artist development itself. Until then, South Korea's trainee system will remain exceptionally good at preparing a handful of teenagers for the spotlight — and far less prepared for the many whose dreams end before the curtain ever rises. 2026-07-30 17:46:14
  • Samsung SDS Plans to Expand AI Infrastructure to 800MW by 2031
    Samsung SDS Plans to Expand AI Infrastructure to 800MW by 2031 Samsung SDS plans to expand its artificial intelligence (AI) infrastructure from the current 110 megawatts (MW) to over 800 MW by 2031. As demand for the latest graphics processing units (GPUs) rapidly increases, the company will also significantly grow its AI transformation (AX) business in the finance and public sectors.In its preliminary second-quarter results, Samsung SDS reported revenues of 3.7178 trillion won and an operating profit of 231.8 billion won. Compared to the same period last year, revenues increased by 5.9%, while operating profit rose by 0.7%.During a conference call on July 30, CEO Lee Jun-hee stated, "The shortage of AI infrastructure presents a significant growth opportunity," adding that the company aims to expand to 230 MW by 2029 and over 800 MW by 2031. The company plans to sequentially launch its Dongtan Data Center West in 2023, followed by the national AI computing center in Haenam in 2028 and the AI data center in Gumi in 2029.The business model will include a capital expenditure (CapEx) model with direct ownership of data centers, a partial equity investment model, and a design-build-operate (DBO) model. The DBO business secured its first conceptual design order in the first quarter, with additional business opportunities materializing in the second quarter.Kim Eun-young, Vice President of Samsung SDS's Cloud Services Division, noted that the 800 MW target encompasses all three models, stating, "The CapEx model primarily focuses on demand from affiliated companies, but we are also in discussions for data center collaborations with global AI firms like OpenAI and Anthropic."Regarding the operational status and additional investment plans for the NVIDIA B300, Kim said, "More than 90% of the existing B300 units are being used for customer services," and added that the company plans to deploy an additional 1,240 B300 units by the end of the year for commercialization next year. Investments in next-generation GPUs like Vera Rubin and additional NPU investments are also under consideration.Samsung SDS is integrating the 'Renegade' neural processing unit (NPU) from Furiosa AI into the Samsung Cloud Platform, expanding inference services that allocate costs between GPUs and NPUs based on workload.In the finance AX sector, the company has been selected as the preferred bidder for Woori Bank's AI agent banking project and has secured a contract for the Korea Export-Import Bank's generative AI system development. In the public sector, it is promoting the spread of the Briti solution across 47 ministries and 180,000 personnel. Song Hae-kyu, Vice President of the Solutions Division, stated, "We aim to secure 30 ministries and 130,000 personnel by the end of the year to create stable recurring revenue starting next year."CEO Lee explained that Hanwha Securities' investment in Dunamu is a "strategic investment for entry into digital asset infrastructure, not just a financial investment," with plans to develop stablecoin infrastructure, virtual asset-based financial SI, and AI business initiatives.* This article has been translated by AI. 2026-07-30 17:44:20
  • Transforming Saemangeum into South Koreas Physical AI Capital
    Transforming Saemangeum into South Korea's Physical AI Capital South Korea stands at a pivotal moment in the industrial revolution. Beyond semiconductors and generative AI, the era of Physical AI, where artificial intelligence drives real-world applications, is now upon us. This new phase involves AI controlling robots, managing factories, and autonomously overseeing systems in automotive, agriculture, logistics, and energy. The future competitiveness of nations will likely hinge not on how much AI is developed, but on how deeply it is integrated into industrial practices. In light of these changes, North Jeolla Province, particularly Saemangeum, possesses significant potential to become a new growth hub for South Korea. What is needed now is not merely the establishment of industrial complexes, but a strategic national decision to cultivate Saemangeum as the country's Physical AI capital. The Physical AI industry cannot be realized through software alone. For AI to function in the real world, three essential components are required: sensors, batteries, and actuators. Sensors perceive the environment, batteries provide energy, and actuators translate AI decisions into physical actions. Strategically nurturing the component industries in these three areas and consolidating research and production bases is the starting point for industrial policy in the Physical AI era. Saemangeum has a rare geographical advantage for building such an industrial ecosystem. It boasts ample industrial land, port facilities, and logistics infrastructure, with high potential for integration with the automotive industry. By combining AI-based smart factories and robotics manufacturing clusters, Saemangeum can evolve from a mere industrial complex into a global hub for Physical AI innovation. However, the focus for North Jeolla should not be limited to Physical AI. Agricultural AI represents a unique competitive edge for the region. Leveraging the research capabilities of the Rural Development Administration and utilizing agricultural satellite data can elevate South Korea's smart agriculture to new heights. In the face of climate change, enhancing productivity and ensuring the sustainability of agriculture through AI is no longer optional but essential. North Jeolla must become a leader in the demonstration and commercialization of agricultural AI. Another critical area is the fusion of renewable energy and AI. AI data centers and factories require substantial power. Saemangeum's renewable energy resources, including solar, wind, and hydrogen, provide a strong competitive advantage to meet this demand. A strategy that combines green energy with the AI industry is a pathway to achieving both carbon neutrality and industrial competitiveness. Ultimately, North Jeolla's future strategy can be clearly defined around three pillars: Physical AI, Agricultural AI, and Renewable Energy AI. These sectors are not isolated industries but part of a cohesive ecosystem that supports each other. Manufacturing will innovate through AI, agriculture will advance through data, and energy will serve as the foundation for the AI industry. When these three elements are interconnected, North Jeolla can emerge as a new central axis of South Korea's AI industry. To achieve this, bold government policy support is essential. Designating Saemangeum as a national Physical AI special zone and strategically attracting AI component industries, robotics, and smart manufacturing companies is crucial. Strengthening collaboration between academia and industry, cultivating specialized talent, and creating an environment that encourages free investment and research through regulatory innovation and tax incentives are necessary. National research and development projects should also be concentrated in Saemangeum. The competition in the AI era is no longer just between individual companies or cities. It is a competition among national industrial ecosystems, and only regions that prepare for the future can seize growth opportunities. Now is the time for North Jeolla to turn this opportunity into reality. Saemangeum must not remain a symbol of land reclamation. It should transform into the starting point of South Korea's industrial transformation and a stage for global Physical AI innovation. The challenges faced by North Jeolla should evolve into a national strategy for the future of South Korea. What is needed now is not discussion, but action; not declarations, but bold investments and policy initiatives. Making Saemangeum the Physical AI capital of South Korea is not a choice but a strategic necessity for the future.* This article has been translated by AI. 2026-07-30 17:44:10
  • Lotte Innovate Reports 2nd Quarter Revenue of 274.5 Billion Won, Operating Profit Up 54%
    Lotte Innovate Reports 2nd Quarter Revenue of 274.5 Billion Won, Operating Profit Up 54% Lotte Innovate reported a double-digit increase in operating profit for the second quarter of this year compared to the same period last year, driven by improved profitability in its core business and enhanced earnings from key subsidiaries.On July 30, Lotte Innovate announced that it achieved consolidated revenue of 274.5 billion won and an operating profit of 12.4 billion won. The operating profit rose by 54% year-on-year, with the operating profit margin increasing by 1.7 percentage points to 4.5%.On a standalone basis, the company maintained profitability through selective orders and improved project execution efficiency. A company official stated, “As part of Lotte Group's focus on profitability, we meticulously reviewed the business viability and profitability from the order stage.”Improved earnings from major subsidiaries also contributed to the growth in consolidated operating profit.Lotte Innovate is strengthening its long-term growth drivers centered on data center design, construction, and operation (DBO) and artificial intelligence transformation (AX).The DBO business is identified as a key growth driver that will increase the share of high-value-added projects in the future. Leveraging nearly 20 years of experience operating data centers in Seoul, Daejeon, and Yongin, Lotte Innovate is expanding its DBO business, which encompasses design, construction, and operation.In November of last year, the company signed a memorandum of understanding with Ace Air Conditioning for collaboration in the data center business, followed by securing the DBO project for the Kamsquare Yongin data center in December. In February of this year, it also obtained the DBO project for the Edge Data Center from Aegis Asset Management.The company views the growing demand for AX transformation within the group as another long-term growth opportunity. Lotte Innovate is supporting business innovation across group companies based on its self-developed integrated AI platform, 'iMember,' and a 'hybrid AX execution system' that utilizes both in-house and external generative AI.This strategy aims to actively target AX demand not only from group companies but also from external clients by combining existing capabilities in cloud, intelligent IT outsourcing (ITO), and integrated security.Lotte Innovate is also enhancing its competitiveness in the physical AI sector. After establishing a dedicated organization for physical AI and robotics in August of last year, the company introduced a future-oriented convenience store featuring humanoids in collaboration with Korea Seven in February.In April, it was selected for the Ministry of Science and ICT's 'Generative AI Talent Development Project' and is pursuing joint development of physical AI models with KAIST and Yonsei University. This month, it participated in the '2026 Korea AI Innovation Talent Connect' to strengthen the acquisition of key talent in AI and digital fields and enhance industry-academia cooperation.Subsidiaries are also accelerating the advancement of growth businesses. The electric vehicle charging subsidiary, EVSys, is intensifying its global market efforts, focusing on North America and Southeast Asia. Calibers is enhancing business synergy within the group by combining immersive commerce technology with the retail capabilities of Lotte ON and Lotte Hi-Mart to create new customer experiences.A Lotte Innovate official stated, “The second-quarter results reflect the outcomes of improved project execution efficiency and the recovery of earnings from key subsidiaries, based on our core business competitiveness. We will continue to focus on profitability while actively commercializing future growth businesses such as data center DBO and AX to solidify our foundation for sustainable growth.”* This article has been translated by AI. 2026-07-30 17:44:00
  • Increased Content Fees from MPPs Duplicate Programming Limit Viewer Choices
    Increased Content Fees from MPP's Duplicate Programming Limit Viewer Choices The structure of transactions in which multiple channel operators (MPOs) repeatedly schedule the same content across affiliated channels and bundle them for supply is increasing the content fee burden on pay-TV operators and limiting viewers' actual choices. Despite courts ruling that program supply contracts end when the contract period concludes, concerns have been raised that government guidelines effectively make it difficult to terminate contracts, thereby distorting the market.On July 30, Yoo Seong-jin, a professor at Soongsil University, presented findings from an analysis of nine MPOs and 43 channels at a special seminar hosted by the Korean Association for Journalism Studies titled 'Improving the Pay-TV Channel Transaction Market.'The analysis revealed that the highest duplicate programming rate among channels within the same corporation reached 98%. Five MPOs had duplicate programming rates exceeding 80%, and when considering channels with over 80% duplicate programming as the same channel, it was found that a movie channel from one MPO was nominally three channels but effectively only one.Professor Yoo pointed out that the core issue lies not in the duplicate programming itself but in the method of bundling affiliated channels as a single product for transactions. While contracts are technically structured as individual agreements for each channel, negotiations often prioritize popular channels, leading to a structure where the entire set of affiliated channels is supplied together, making individual channel negotiations and fee assessments based on performance virtually impossible.This transaction structure is resulting in increased cost burdens for pay-TV operators. Last year, the payment rate for content fees relative to total subscription fees for system operators (SOs) rose to 90.2%, with some operators reporting a payment rate of 116.2%, indicating that they could not cover content fees solely with the subscription fees collected from customers.Professor Yoo stated, "Duplicate channels are occupying limited content resources, weakening the competitiveness of small program providers (PPs)." He noted that the revenue market share of 116 small PPs has remained at an average of 9.9% over the past five years, leading to a 'decline in qualitative diversity' as new entrants face barriers to market entry and viewers' actual choices diminish.As a solution, he suggested enhancing the effectiveness of existing regulations prohibiting bundled sales rather than introducing new regulations. If an MPO refuses to engage in individual channel contracts, this should be recognized as grounds for channel termination, and it should be assessed whether individual channel negotiations are genuinely feasible and whether fees are determined based on performance metrics such as viewership. Additionally, he emphasized the need for regulatory agencies to regularly disclose duplicate programming rates and the actual number of channels to reflect in content fee assessments and PP evaluations.* This article has been translated by AI. 2026-07-30 17:44:00
  • Won hits strongest level in about 5 months after Fed sends mixed signals
    Won hits strongest level in about 5 months after Fed sends mixed signals SEOUL, July 30 (AJP) - The South Korean won strengthened to its highest level in about five months on Thursday, while government bond yields rose as currency and fixed-income markets drew contrasting signals from the Federal Reserve's latest policy decision. The won closed daytime trading at 1,437.4 per dollar, strengthening by 9.3 won from the previous session's close of 1,446.7. The currency traded between 1,435.9 and 1,447.7 during the session before returning below the 1,440 mark, finishing at its strongest closing level since Feb. 26. The Fed kept its benchmark rate unchanged at 3.50 to 3.75 percent, but three policymakers voted for a quarter-point increase, marking an unusually sharp split within the rate-setting committee. Currency traders, however, viewed Chair Kevin Warsh's remarks at a press conference as less hawkish than expected and scaled back bets on a September rate hike, while dollar inflows from SK hynix's American depositary receipt (ADR) issuance and month-end exporter selling provided additional support for the South Korean currency. In the bond market, the three-year Korea Treasury Bond yield rose 3.1 basis points to 3.831 percent, while the 10-year yield climbed 5.4 basis points to 4.311 percent. The gap between the two maturities widened to 48.0 basis points from 45.7 basis points, producing a bear-steepening move in which long-term borrowing costs rose faster than shorter-term rates. The rise reflected a sell-off in global sovereign debt after the Fed meeting, with the U.S. 10-year Treasury yield approaching 4.7 percent and the 30-year yield breaking above 5.2 percent to its highest level in 19 years, suggesting investors are demanding greater compensation for persistent inflation, heavy government borrowing and the risk that interest rates remain elevated for longer. 2026-07-30 17:43:00
  • Government Moves to Eliminate Wedding Penalty in Housing and Loans
    Government Moves to Eliminate 'Wedding Penalty' in Housing and Loans The government is taking steps to reduce the so-called "wedding penalty," which has resulted in disadvantages for newlyweds in areas such as loans, public housing, and youth asset formation. This initiative involves revising regulations related to public housing eligibility, interest rates on jeonse loans, and tax benefits for married couples.According to relevant authorities on July 30, the government is gradually improving the marriage penalty in housing, asset formation, and tax sectors based on the "Marriage-Friendly Policy Improvement Plan" announced last month.The pace of these improvements has accelerated. President Lee Jae-myung requested a comprehensive investigation into cases where newlyweds face disadvantages after marriage during a national discussion on real estate policy held on July 23. Prime Minister Han Seung-soo also mentioned on July 27 that 12 additional related cases have been identified, and discussions on improvement measures are ongoing with relevant departments. Lowering Barriers for Public Housing and Reducing Jeonse Loan BurdensThe most significant changes are in the housing support sector. For dual-income newlywed households, the income threshold for happy housing will increase from 7.63 million won to 9.39 million won, while the general supply standard for integrated public rental housing will rise from 7.98 million won to 9.24 million won.Additionally, unmarried young individuals living in public rental housing will be allowed to renew their contracts once, even if their income or asset levels exceed the criteria after marriage. This aims to alleviate the burden of losing residency or being forced to vacate due to increased income from dual-income households.The interest burden for young couples utilizing the buffer jeonse loan will also decrease. When extending a loan approved before marriage, the additional interest rate applied if the combined income exceeds the threshold will be halved from 0.3 percentage points to 0.15 percentage points. However, the additional interest rate will not be eliminated entirely, meaning some burden based on combined income will remain. Expanding Housing Supply for New Parents and Lowering Savings Barriers for Married YouthIn the housing supply sector, support has shifted focus from the duration of marriage to the presence of children. As of July 15, a new special supply program for newborns has been established, allocating 10% of the supply of private housing to families with children under two years old.While the existing special supply for newlyweds requires marriage within the last seven years, the newborn special supply allows families with children under two to apply regardless of marital status or duration. Couples who have not registered their marriage or have been married for over seven years can also qualify if they have a child under two.The youth future savings program has also relaxed the income criteria for married couples. The income threshold for a two-person household consisting of a subscriber and their spouse has increased from 200% to 250% of the median income for the standard type, and from 150% to 200% for the preferential type.Launched last month, the youth future savings program allows participants to contribute up to 500,000 won monthly for three years, with the government providing support of 6% or 12% of the contributions based on income. This measure aims to reduce the issue of disqualification due to the combined income from marriage registration. Adjustments to Tax Deductions for Weekend Couples and Fuel Tax for Small CarsIn the tax sector, a plan is underway to allow couples living separately due to work or relocation to each receive tax deductions on their jeonse loan principal and interest payments. Currently, even if they reside separately, they are considered a single household, resulting in only one person receiving the benefit.The issue of fuel tax refunds for couples who each own small cars before marriage will also be addressed. Under the current system, after marriage registration, a household is considered to own two small cars, which may exclude both from the refund. The plan is to allow a refund of up to 300,000 won annually for one small car per household.These tax-related measures are in the planning stage and will require amendments to relevant laws. The actual implementation timeline and specific requirements will need to be confirmed through future tax law revisions and subsequent regulations.This reform aims to reduce the inequities faced by couples who lose support or face increased burdens after marriage. However, concerns remain that the combined income criteria for major policy loans, such as the Ddimum and Bogumjari loans, still exist, limiting the elimination of the wedding penalty for dual-income newlywed couples.Kim Dae-jong, a professor at Sejong University's Business School, stated, "This policy to improve institutional inequities is significant in lowering barriers to marriage and childbirth," but emphasized that to enhance its practical effects, support for acquisition taxes and property taxes for first-time homebuyers should also be strengthened.* This article has been translated by AI. 2026-07-30 17:40:00
  • Young Adults Embrace Retirement Savings and ETFs for Tax Benefits
    Young Adults Embrace Retirement Savings and ETFs for Tax Benefits Yoon, a 28-year-old who recently started working, opened a retirement savings fund account to invest a fixed amount each month in domestic exchange-traded funds (ETFs). The appeal of long-term investing through ETFs, combined with the tax deductions available during year-end tax settlements, motivated his decision.Yoon stated, "Although my salary isn't high, I believe it's better to steadily build assets from the beginning of my career, when I have more time to invest. While I could buy ETFs through a regular account, I naturally chose retirement savings for the tax benefits it offers."Perceptions of retirement savings among those in their 20s and 30s are changing. More young people are utilizing these accounts not just as long-term retirement products but as 'tax-saving investment accounts' that allow them to enjoy both tax deductions and long-term ETF investments.According to a report released on July 18 by the Financial Services Commission and the Financial Supervisory Service, the number of retirement savings account holders in their 20s and 30s reached 2.29 million at the end of last year, a 13.8% increase from the previous year. This growth rate is more than double that of those in their 40s and 50s, which was 6.6%. Additionally, the number of account holders under 20 surged by 53.4% to 135,000.The shift towards investment-type products is also notable. During the same period, the accumulated funds in retirement savings funds increased by 50.7%, from 40.7 trillion won to 61.3 trillion won. The ease of opening accounts via mobile platforms and the ability to regularly purchase ETFs with small amounts have contributed to this trend among younger investors.The most direct factor attracting the 2030 generation is the tax deduction. Individuals can contribute up to 18 million won annually across retirement accounts, including retirement savings and individual retirement pensions (IRPs). Retirement savings accounts allow for tax deductions of up to 6 million won, and utilizing an IRP can increase the deductible amount to 9 million won.For workers with a total salary of 55 million won or less, a deduction rate of 16.5% applies, while those earning above this threshold receive a 13.2% deduction rate. A worker earning 55 million won who contributes 6 million won to a retirement savings account can receive a maximum deduction of 990,000 won, and if they contribute 9 million won by including an IRP, the deduction can reach 1.485 million won. Actual refund amounts may vary based on previously paid taxes and other deductions.Another advantage is the ability to defer taxation. In a retirement savings account, profits from buying and selling funds or ETFs are not taxed immediately. Taxes are only imposed when funds are withdrawn early or when retirement benefits are received after age 55. By reinvesting the money saved from tax deductions and the amount that would have gone to taxes, investors can enhance their long-term compounding effects.The popularity of retirement savings funds is also attributed to their returns. The investment report indicated that the overall return on retirement savings last year was 10.6%. In comparison, general funds yielded 31.3%, and ETFs returned 27.4%. The combined return for investment-type products was 29.3%, significantly surpassing the 4.0% for retirement savings trusts and 0.8% for retirement savings insurance.However, these figures reflect the strong market performance of the previous year. Unlike deposits, funds and ETFs do not guarantee principal, and losses can occur if the market declines. Additionally, changes in the criteria for calculating returns since the fourth quarter of last year and differing disclosure standards for products limit straightforward comparisons.The range of products available for investment in retirement savings accounts has also expanded. According to Toss Securities, there are currently 1,046 domestic ETFs available for trading within their retirement savings accounts. Options range from products tracking major domestic and international indices to those investing in dividend stocks, bonds, gold, artificial intelligence (AI), and semiconductors.Investors can also choose to automate monthly transfers to purchase ETFs rather than making a lump-sum investment. This approach allows for dollar-cost averaging and aligns well with the investment strategies of young professionals who can gradually increase their contributions as their incomes rise.However, investors should be aware that retirement savings and pension plans have different investment regulations. While there are no specific limits on risky assets in retirement savings funds, IRPs and defined contribution (DC) pension plans can only invest up to 70% of total assets in equity-type ETFs. Utilizing bond-mixed ETFs, classified as safe assets, can increase the actual stock proportion to a maximum of 85%, but this strategy pertains to pension plans rather than retirement savings.Brokerage firms are also entering the competition for retirement savings services aimed at the 20s and 30s demographic. Toss Securities recently launched its first tax-saving product, a retirement savings account, on July 24. The service includes personalized reports showing tax deduction progress and estimated tax savings for 2026, along with features for viewing domestic ETFs, stock accumulation, and automated transfers. The entire process, from account opening to management, can be handled through a mobile application, enhancing accessibility.Given the significant tax benefits, caution is advised. Retirement savings accounts are designed for long-term investment. Generally, funds can only be withdrawn as retirement benefits after five years and upon reaching age 55. If money is withdrawn for purposes other than retirement, such as living expenses, wedding funds, or home purchases, a 16.5% other income tax may be imposed on the contributions and earnings that received tax deductions.Closing an account may require returning a substantial portion of the tax benefits received. However, not all contributions that did not receive tax deductions are subject to taxation.Experts advise against trying to maximize tax deduction limits from the outset. Young individuals needing significant funds for marriage, rental deposits, or home purchases should first secure living expenses and emergency funds before starting with an amount they can maintain over the long term.An industry insider remarked, "Even with substantial tax deduction benefits, one should not strain their living funds by contributing excessively to retirement accounts. It is more practical to automate a manageable monthly amount and gradually increase contributions as income rises."* This article has been translated by AI. 2026-07-30 17:40:00
  • Should Couples Delay Marriage Registration for Financial Benefits?
    Should Couples Delay Marriage Registration for Financial Benefits? A couple planning to marry in the second half of next year has decided to hold their wedding ceremony but postpone their marriage registration. This decision is influenced by the income requirements for the government-backed housing loan program, Bogumjari Loan. Unmarried individuals can apply if their annual income is below 70 million won, but married couples must meet a combined income limit of 85 million won. Since both partners work, the couple would exceed this income threshold upon registering their marriage.They also considered the financial burden of not being able to access policy loans. Since July 7, the basic interest rate for the Aki-e Bogumjari Loan ranges from 4.90% to 5.20%, depending on the term. In comparison, the couple found a market bank mortgage loan with an interest rate of 6.37%. For a principal of 240 million won, this results in an annual interest difference of approximately 3.53 million won. While the actual burden varies based on loan terms, repayment methods, and preferential rates, the decision to register their marriage could significantly impact their financial costs.Many couples, like this one, are choosing to delay their marriage registration after holding their wedding ceremony. This is often due to the combined income and debt assessments that could disqualify them from certain policy loans or housing support programs.According to statistics from the National Data Agency, among the 240,326 couples who registered their marriage last year, 47,096 couples, or 19.6%, registered after being married for over a year. This percentage has increased from 12.8% in 2020 to 19.6% last year, reflecting a growing trend.Marriage registration has become more than just an administrative procedure; it now affects loan limits, housing subscription eligibility, and tax implications. Couples preparing for marriage should carefully consider their individual incomes, debts, housing history, and plans for homeownership and childbirth when deciding when to register their marriage. Delaying registration is not always advantageous, as benefits available after marriage may outweigh the costs.Check Combined Income for Policy LoansIf a couple's combined income exceeds the policy loan criteria, delaying marriage registration may be beneficial. Notable products include the Didirim Loan for home purchases and the Bogumjari Loan, as well as the Buteumok Loan for rental support.The Didirim Loan has a combined income limit of 60 million won for general households, 70 million won for first-time homebuyers with two or more children, and 85 million won for newlyweds. The newlywed-specific Buteumok rental loan is available for households with a combined income of 75 million won or less. Before marriage, only one partner's income is considered, but after marriage, the combined income could exceed the limits.First-time homebuyer benefits also vary by product. The first-time Bogumjari Loan requires that neither partner has a history of homeownership. If one partner has previously owned a home, the other may not qualify for the first-time Bogumjari Loan after marriage registration.The general Bogumjari Loan allows for a maximum of 360 million won, while first-time buyers can access up to 420 million won. The loan-to-value ratio (LTV) for first-time buyers can be as high as 80%, affecting their borrowing capacity. However, limits may differ for properties in regulated areas or metropolitan regions.Housing subscriptions have different criteria than policy loans. If a spouse has previously owned a home or has a history of winning a housing subscription, it does not restrict the applicant's eligibility for newlywed or first-time special allocations, as the system has been improved. Therefore, it is not always advantageous to delay marriage registration based solely on one partner's past homeownership.Combined Income, Subscriptions, and Tax Benefits May Favor MarriageConversely, for dual-income couples looking to purchase a more expensive home than what policy loans cover, registering their marriage may be beneficial for combining incomes. Including a spouse as a co-borrower in bank mortgage assessments can increase borrowing capacity compared to evaluating only one partner's income.The debt service ratio (DSR) measures the proportion of annual income that goes toward repaying loans. While increased income can raise borrowing limits, existing loans from the spouse are also considered, so the actual benefits vary by couple.Couples planning to have children should also consider newborn special loans. The eligibility for these loans depends on whether the couple has given birth or adopted within two years of the loan application date, rather than their marriage registration status. The newborn special Didirim Loan supports up to 400 million won for homes priced below 900 million won, while the newborn special Buteumok Loan offers up to 240 million won for homes priced below 500 million won in metropolitan areas. Dual-income households can apply if their combined income is below 200 million won.For couples without homes preparing for housing subscriptions, registering their marriage may provide eligibility for newlywed special allocations. This program targets households without homes that have been married for seven years or less. Recently, opportunities for special allocations have also expanded for households with children under two years old.However, the eligibility period for newlywed special allocations begins from the date of marriage registration. If immediate funding for housing is challenging or if the desired location's supply plans are distant, couples should consider both the timing of their registration and their financial readiness.If each partner owns a home, the joint registration benefit may also be an advantage. Although they may temporarily become dual homeowners upon marriage, selling one property within ten years of marriage can qualify for single-home status under certain conditions. Gains up to 1.2 billion won can be tax-exempt, provided the property has been held for at least two years.Ultimately, the advantages and disadvantages of marriage registration cannot be determined by a single criterion. If policy loans are needed, couples should assess their combined income and housing history, while those considering bank loans must evaluate both partners' incomes and debts. They should also consider their housing subscription plans, childbirth intentions, and the timing of selling any existing properties.Seoji Yong, a professor at Sangmyung University, stated, "The root of the marriage penalty lies in outdated system designs that aggregate income and assets at the household level, failing to reflect the realities of dual-income households and housing costs. In the future, policies should be designed to minimize losses or ideally generate slight gains from marriage and childbirth by simulating taxes, loans, and housing subscriptions based on individual circumstances, life cycles, and regional housing costs."* This article has been translated by AI. 2026-07-30 17:36:10
  • Mia-dong 75 Set for Redevelopment into 45-Story Residential Complex
    Mia-dong 75 Set for Redevelopment into 45-Story Residential Complex "There are no villa listings available. When they come up, they sell immediately. Many people are hopeful because the redevelopment will bring about 1,600 units. Right now, only multi-family housing listings remain," said a representative from a local real estate agency in the Mia-dong 75 area of Gangbuk-gu, Seoul, on July 29.The representative noted, "Prices have been gradually rising, with current market values for multi-family homes at around 700 million to 800 million won, and for multi-unit and apartment buildings at about 400 million to 500 million won. Since this is a designated area, actual residency is required."Exiting from Exit 1 of Mia-sagori Station in Gangbuk-gu and walking behind Lotte Department Store leads to Mia-dong 75. The narrow alleys are lined with red-brick multi-family and single-family homes, alongside long-standing local shops like a grocery store and a laundromat. Despite being a prime location close to downtown Seoul, the area has a landscape that seems frozen in time, but plans are underway for a large complex of up to 45 stories and 1,600 units.The Mia-dong 75 area is located directly behind Exit 1 of Mia-sagori Station, adjacent to Lotte Department Store. It offers convenient access to central business districts like City Hall and Gwanghwamun, with travel times of about 30 minutes without transfers. The proximity to large department stores and commercial facilities enhances the area's livability.However, entering the alley behind the department store reveals a starkly different scene. Most of the single-family and multi-family homes were built in the 1960s, and some alleys are so narrow that pedestrians must step aside for passing vehicles. The section leading toward Opaesan is notably steep, with several stair-connected alleys.During a weekday morning visit, the neighborhood was relatively quiet. Older local shops and laundromats stood out more than franchise cafes or convenience stores, and residents were seen chatting in the shade outside their homes. This coexistence of a bustling transportation hub and an aging residential area is just a few minutes apart.Signs of redevelopment efforts were evident throughout the area. A banner stating, "60% consent for designation as a maintenance zone received" was displayed at the site. The real estate representative remarked, "After the rapid integrated planning was confirmed, expectations for redevelopment have surged, and villa listings have essentially dried up. When properties do become available, they are traded quickly."On March 19, the Seoul city government confirmed the rapid integrated planning for the housing maintenance-type redevelopment project in the Mia-dong 75 area. If the project proceeds as planned, it will result in a residential complex of up to 45 stories and approximately 1,600 units.The project's feasibility has also significantly improved. Relaxation of regulations in transportation hubs will elevate the existing second-class general residential area to third-class general residential and quasi-residential areas, potentially increasing the allowable floor area ratio to about 246%. With public contributions factored in, this could rise to approximately 287%. Reports indicate that the maximum floor area ratio has been set at around 346.54% in the current plan.The design of the complex takes surrounding conditions into account. The southwestern side, adjacent to the transportation hub, will feature a skyline of up to 45 stories, while the area near Songjung Elementary School will be planned at lower mid-rise levels to ensure sunlight access.Infrastructure improvements are also on the agenda. Ohyun-ro to the north will expand from three lanes to five, while Opaesan-ro to the east will increase from two lanes to a maximum of four to five lanes. Nearby roads, including Dobong-ro 10-gil, will also be upgraded, and two parks along with social welfare facilities are set to be established.The redevelopment project aims not only to replace aging housing but also to widen roads, create parks, and enhance urban infrastructure. The narrow alleys and deteriorating residential environment currently found in the Mia-dong 75 area are expected to undergo significant transformation through this initiative.As I walked around the area, the old brick houses and winding alleys still retained their historical charm. However, the redevelopment banners and the real estate agency's assertion that "properties sell immediately when they become available" indicate that this neighborhood is already preparing for its next transformation. While the blueprint is in place, there are still lengthy procedures before actual occupancy, necessitating a careful examination of the project's stages and property rights.* This article has been translated by AI. 2026-07-30 17:36:00